Shifts in the AD and AS curves and Equilibriums

The impact of shifts of AD curve are:

An increase in AD raises realGDP, lowers the unemployment rate, and increases the aggregate level of prices.

A decrease in AD lowers real GDP, increases the unemployment rate, and decreases the aggregate level of prices.

The impact of shifts of AS curve are:

An increase in AS raises real GDP, lowers the unemployment rate, and lowers the aggregate level of prices.

A decrease in AS lowers real GDP, raises the unemployment rate, and raises the aggregate level of prices.

Demand-driven expansions are normally associated with rising interest rates and inflation, whereas contractions are associated with lower inflation and interest rates.

Supply-driven expansions are associated with lower inflation and interest rates, whereas contractions are associated with rising inflation and interest rates.